DenCO Property Management (DenCO) wants to let real estate rental owners know that the Colorado legislature and Governor Polis have once again decided that tenants are fragile little angels who must be protected from our sinister plot to…check notes…keep their deposits when they leave our properties looking like a frat house after a toga party. Here is the rundown of punishing tenant rights laws that will make it harder for professionals trying to run a rental business. HB25-1249, summarized below, becomes effective on January 1, 2026. There are also some changes concerning tenants in HB25-1168 who are victim-survivors of domestic violence and were effective on May 22, 2025.
Copies of the complete Acts as signed by the Governor, are available online at https://leg.colorado.gov/bills/hb25-1168 and https://leg.colorado.gov/bills/hb25-1249.
Normal Wear and Tear Or: You Get to Eat the Bill
The legislature has once again sharpened its crayons to help us understand what “normal wear and tear” means. Apparently, dirtier than when they moved in is now not considered “wear and tear,” So property managers now get to argue over what is “dirtier” instead of just using common sense. To help eliminate any confusion about what dirty means, below are examples.
- Tenant leaves the oven caked with three years of lasagna. That’s “normal.”
- Walls now have handprints in colors not found in nature? Totally “expected.”
- Is the unit dirtier than a gas station bathroom? Okay, fine, maybe landlords can say that is wear and tear — but only if they can prove it was cleaner when they moved in.
Security Deposits: AKA Tenant Vacation Funds
- Property managers cannot deduct for preexisting damage. Which is fine, nothing new there,but the burden of proof is on the landlord. Better get those move-in inspection forms notarized, take tons of pictures, video everything, and maybe have them blessed by a priest, rabbi, or shaman.
- Property managers must send tenants “all relevant documentation,” including photos, invoices, and any therapist’s notes about how this whole business is driving them insane. If tenants think something is missing, they can demand it within 14 days, because they are now the boss.
- Landlords can only deduct for charges “clearly listed in the lease.” So, unless the lease includes $75 for deglittering the ceiling,” forget it, that money is going to tenants’ vacation funds.
The Awkward Walk-Through
Tenants can now request a “walk-through” inspection with them present before moving out. Can’t wait for the part where they argue every scratch is “charm” and every stain is “patina.” DenCO suggests beating them to the punch and making inspections the norm rather than the exception, and documenting every nook and cranny of the unit.
Bad Faith Equals Guilty Until Proven Innocent
Withholding too much? That is bad faith. Withholding too little? Still bad faith. If landlords, property managers, and real estate investors keep any part of the deposit, they are likely villains twirling their mustaches. DenCO documents any repairs with receipts and other documentation. As DenCO likes to remind our owners, “the party with the best documentation usually wins in court.”
Returned Mail: Guess Who Gets to Play Bank
If refund payments are returned to the landlord after being sent to the tenants’ last-known address, the property manager must hold the payment for at least one year after receiving it. If tenants remember and request the money within that period, property managers must disburse the payment within fifteen calendar days. God help the landlord who has sloppy files.
Paint & Carpet: Tenants Win, You Lose
Is the carpet more than ten years old? Well, that is now considered a priceless antique, so even if a tenant’s pet goat chews circles into it, property managers cannot charge them a dime. If only one section is damaged, too bad—landlords are not allowed to replace the whole thing for continuity, so they need to patch it with random carpet squares from the Home Depot and call it “bohemian chic.” Painting is no different. Suppose tenants decide to turn a neutral beige wall into their version of a Jackson Pollock splatter painting, property managers are not permitted to repaint the entire wall. Instead, they can only charge for the portion they retouched. In short, property management companies no longer maintain rentals—our legislature has kindly decided they are now curating and funding quirky art exhibits called rental units.
Domestic Violence Exception
Here is a landlord’s translation: if the abuser trashed the place during an incident, any damage repair cannot be billed to the survivor. Because, clearly, landlords should also act as social workers, chaperones, and free housing providers. If the traumatized renter breaks the lease, the landlord might get one month’s rent…unless another tenant is still there. In which case, property managers get nothing. The law is somewhat fuzzy, so it’s best to keep legal counsel on retainer.
Best Practices Or: How to Become a Court Reporter
The new definition of “best practices” basically means rental property professionals are now court reporters with a side gig in property management. It is best to be in CYA mode at all times, taking photos, videos, and maybe 3D scans of every corner of the rental unit. They are also full-time archivist archiving every receipt, saving every text, and documenting every tenant interaction as if they were preparing evidence before the Colorado Court of Appeals. Of course, property managers need to have a clean suit in the closet at all times for the inevitable trips to small claims court, where tenant lawyers will argue most common sense fees are predatory shakedowns. And let’s not forget—many of the legislators who wrote these laws are renters themselves, and worse, lawyers, which means making life harder for property management companies is not just policy, it’s their side hustle.
Reality Check – Rents Are Going Up
Legislators, when the cost of doing business goes up, most companies pass these expenses to their customers. Managing rental properties is no different – rents are going to go up to cover all these punishing tenant rights laws. Bad policy has economic consequences. The State’s economic growth has fallen from fifth to 41st over the last 15 years. Most people believe that housing affordability is the main culprit.
In a Denver Gazette opinion piece by Colorado State Senator Paul Lundeen, dated January 5, 2025, titled “Coloradans Deserve Better,” Colorado Senate Republicans have identified thousands of dollars in rent increases, according to Lundeen SB24-094 Warranty of Habitability Law, and other tenant rights bills like HB25-1249, and HB25-1168 will increase rents across Colorado about $2040 annually or $170 per month. Click here to read the DenCO blog titled, “Fees, Fees and More Fees.”
With the avalanche of punishing tenant rights laws coming out of the Colorado legislature and signed into law by our Governor over the last two years, DenCO feels like we must keep our owners informed of all the new rules and arrange therapy sessions with their favorite psychologists when needed. We strongly advise owners to keep their property management companies close and have their CPAs and attorneys on speed dial. Owners who need a hand, please call 303-722-9688 or fill out this form on the contact page.
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